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Simple English definitions for legal terms
utility fund
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A quick definition of utility fund:
A utility fund is a type of mutual fund that invests only in public-utility securities. A mutual fund is like a big piggy bank where many people put their money together to buy different types of investments, like stocks and bonds. A utility company is a business that provides services like electricity, gas, and water to people. So, a utility fund is a piggy bank that only buys stocks and bonds from companies that provide these services.A more thorough explanation:
A utility fund is a type of mutual fund that invests only in public-utility securities. Mutual funds are investment companies that pool money from multiple investors to invest in a diversified selection of securities.
For example, a utility fund may invest in companies that provide essential services such as electricity, gas, and water. These companies are often regulated by the government and have a stable income stream, making them a relatively low-risk investment.
Utility funds are popular among investors who are looking for a steady income stream and are willing to accept lower returns in exchange for lower risk. They are also a good option for investors who want to diversify their portfolio and reduce their exposure to more volatile sectors of the market.